A major increase in hourly wages has not stopped a record number of unfilled positions in the construction industry, according to a new analysis by the Association of General Contractors of America (AGC).

While 36,000 employees were added to the construction industry last month, 494,000 open construction-industry jobs remained, representing a 40% jump on the previous year, and the largest total for any month in the 21st century. The unemployment rate in construction also fell from 6.7% to 3.8% over the past 12 months, which according to AGC, suggests there are few experienced construction jobseekers left to hire.

The association warns that the outstanding positions will undermine construction activity this year – a warning which we also noted in our coverage of the issue last year. “It is encouraging that contractors were able to add workers in May, but they will need many more to meet the increasing demand for infrastructure and private non-residential projects,” said AGC chief economist Ken Simonson, reacting to the latest figures.

The record number of unfilled positions comes despite a significant increase in the average earnings for construction employees. Average earnings across the industry rose by 6.3% in the last 12 months, the highest since December 1982. The AGC however notes that average earnings in the overall private sector rose by 6.5%, which may partly explain why the earnings increase in construction has not solved the employment gap.

“For contractors to get more workers on board, I think they’ll have to raise pay even more,” Simonson told Construction Dive. “I expect workforce challenges to outlast materials cost or supply chain issues.”

Despite the looming impacts of worker shortages on construction projects, latest figures show that construction starts are accelerating across the country. Monthly construction starts in May 2022 were 7% higher than the previous month, and 17% higher than in May 2021, despite fears of higher interest rates and an economic recession.

Looming uncertainty in the economy and construction worker availability have also not impacted the demand for architectural services, according to the latest figures from the AIA.